Garuda Cons (544271) Mar 2026 Filing Analysis

Construction-service revenue increased from Rs. 21,653.01 lakhs in FY2024-25 to Rs. 52,111.52 lakhs in FY2025-26, making it the dominant revenue engine. This is a substantial expansion of the core business. (5 expanding across 2 engines)

In FY2024-25, Garuda disclosed active projects across five residential, two commercial, one residential-cum-commercial, one industrial, one infrastructure and one civil-construction-cum-services project. The later baseline continues to describe a broader multi-sector execution track record, including residential, hospitality, infrastructure and EPC work. The capability moat is therefore expanding in demonstrated project breadth, although it remains moderate rather than dominant. (2 expanding, 1 stable)

FY2024-25 management stated that it had not reported technology absorption or research-and-development spending, while also discussing adoption of modern construction technologies and digital project-management tools. The later baseline still describes technology adoption as unquantified and weak. There is no concrete evidence of a measurable technology moat developing. (2 stable)

The FY2024-25 report showed virtually no debt relative to equity, with a standalone debt-equity ratio of 0.00. The later baseline reports a consolidated ratio of 0.03, still very low but modestly higher. The balance-sheet moat therefore remains intact but has weakened slightly in relative terms. (2 shifted)

Revenue and profit depend heavily on management estimates of project completion and total cost. If costs rise, claims are rejected, or completion estimates change, previously reported revenue and profit may have to be reduced. [EXECUTION]

FY25 material consumption rose to Rs. 4,284.26 lakhs from Rs. 936.34 lakhs, while construction expenses increased to Rs. 9,666.41 lakhs from Rs. 8,500.22 lakhs. The company explicitly identifies raw-material price volatility and cost escalation as risks, but its disclosures state that commodity-price risk and hedging are not applicable. The FY26 baseline shows much higher materials and construction expenses, together around 66% of revenue, confirming greater cost sensitivity. This risk intensified. (3 intensifying, 1 high-severity)

FY25 standalone contract assets were Rs. 9,613.25 lakhs, equal to about 42.7% of standalone operating revenue of Rs. 22,503.01 lakhs. This was a new and material balance compared with nil contract assets in FY24. The later FY26 baseline reports standalone contract assets of Rs. 21,891.23 lakhs, about 41% of revenue, and consolidated contract assets of Rs. 26,794.66 lakhs. Thus, the risk emerged in FY25 and increased substantially in absolute value by FY26, even though the ratio to revenue remained broadly similar. (5 intensifying, 5 high-severity)

The October 2025 presentation shows a rapid scale-up: H1 FY26 revenue reached Rs. 241.6 crore against Rs. 81.9 crore in H1 FY25, while the order book expanded to approximately Rs. 3,461 crore. This increases the amount of future revenue and profit dependent on execution estimates across multiple projects. The presentation does not disclose contract-asset balances, project-level cost-to-complete estimates, claims, or provision coverage, so deterioration cannot be quantified. The later baseline confirms that contract assets and revenue had become substantially larger, indicating that the underlying estimation exposure increased over time. (1 intensifying, 1 stable, 1 high-severity)

FY25 construction expenses were Rs. 9,666.41 lakhs, including labour and works contract charges of Rs. 9,216.73 lakhs, while material consumption was Rs. 4,284.26 lakhs. Together these costs represented about 61.8% of operating revenue. Management specifically identifies subcontractor dependency, labour availability, raw-material volatility and cost escalation as key industry risks. The FY26 baseline shows labour and works contract charges of Rs. 19,494.78 lakhs and materials consumed of Rs. 14,492.33 lakhs, together about 66% of revenue. Cost exposure therefore increased and the risk intensified. (3 intensifying, 1 high-severity)